Establishing Title

Question 1

what are the three kinds of title assurances?

Answer 1

1. title covenants
2. title option based on public records search
3. title insurance

Question 2

What are Title Covenants:

Answer 2

Title covenants are promises made by the seller about the deed

Question 3

What is title opinion based on public records search?

Answer 3

after searching the public land records an attorney or someone professional renders an opinion about the title

Question 4

Title insurance:

Answer 4

an insurance company issues a policy that ensures grantee’s title.

Question 5

What are the three types of title covenants?

Answer 5

o General warranty deed: grantor warrants title against ALL defects whether they arose before or after he obtained title (buyer preferred)

o Special warranty deed: grantor warrants title against all defects AFTER he obtained title (most common

o Quitclaim deed: grantor makes NO warranties about title, so grantee receives only what grantor has, if anything (Seller preferred)

Question 6

Present Covenant definition

Answer 6

breached , if at all, at the moment the deed is delivered and the real estate transaction closes

Question 7

Covenant of Right of Seisen

Answer 7

Promises that grantor owns the he purports to convey. action for breach –> cause of action accrues at time deed is delivered

Question 8

Covenant of Right to Convey

Answer 8

Promise that grantor has right to convey

Question 9

Covenant against Encumbrances

Answer 9

Promise that there are no encumbrances on the title, other than those listed

Question 10

Future Covenants:

Answer 10

breached, if at all, after closing - most commonly when grantee is actually or constructively by a third party holding superior title

Question 11

What are the present covenants?:

Answer 11

right of seisen , right to convey, covenant against encumbrances

Question 12

What are the future covenants?

Answer 12

Covenant of warranty –> grantor will “guarantee” that he will defend him against any claim of superior title

Covenant of Quiet Enjoyment –> promise that grantee’s possession of property will not be “disturbed” by anyone holding superior title.
 Action for breach  covenant is prospective in nature and is breach only when there is actual or constructive eviction of covenantee by paramount title holder

Covenant of Further Assurances: promise that grantor will take all future steps reasonably necessary to cure title defects that existed at closing.

Question 13

Estoppel by Deed

Answer 13

• Estoppel by Deed: if grantor conveys title to grantee but does not hold title to the land, if they later acquire title to that land, it automatically passes to the grantee

Question 14

First in time rule:

Answer 14

who receives their deed first has priority.

• Bona Fide Purchaser Doctrine: creates special protection for verified BFP which supersedes the first in time rule

o Bona Fide Purchaser: a person who (1) buyer honestly and (2) without notice of any conflicting claim on the property bought (whether or not purchaser is negligent)

first in time rule governs any title dispute UNLESS a subsequent BFP qualifies for protection under state’s recording acts

Question 15

What is race jurisdiction?

Answer 15

purchaser who records first has priority

Question 16

What is a notice jurisdiction

Answer 16

subsequent BFP prevails if he takes without notice of a prior interest; purchaser does not have to record in order to gain priority

Question 17

Race-notice jurisdiction

Answer 17

subsequent BFP who takes without notice and records first has priority

Question 18

What is the shelter rule?

Answer 18

BFP is allowed to transfer his protection to a later grantee

Question 19

Undelivered and Forged deed is

Answer 19

void

Question 20

A fraud deed is

Answer 20

voidable by the grantor, but if the grantee sells to BFP, then BFP wins

Question 21

Unrecorded deed is:

Answer 21

an unrecorded deed is valid BUT recordation is important to protect the grantee from title claims by third parties

recording = notice